Blitz Bureau
NEW DELHI: The Directorate General of Civil Aviation (DGCA) on February 24 notified stricter timelines and clearer rules for refunding airline tickets in India, following years of complaints over delays, high charges and forced credit shells for passengers, according to a report in The Financial Express.
Under the new regulations, airlines are now required to process refunds for credit card ticket purchases within seven days following a cancellation, directly returning the funds to the cardholder’s account. The new norms come into effect from 26 March, 2026.
For tickets paid in cash, refunds must be issued immediately at the airline’s ticket office where the purchase was made. Additionally, for those who booked through travel agents or online platforms, airlines must ensure refunds are completed within 14 working days.
The new policy also places the responsibility firmly on airlines, rather than third-party intermediaries, to handle the refund process efficiently.
The revised Civil Aviation Requirement (CAR) also mandates that airlines return all statutory taxes and airport-linked charges, such as the User Development Fee (UDF), Airport Development Fee (ADF), and Passenger Service Fee (PSF), in cases of cancellation, non-utilisation of tickets, or no-show.
This requirement applies even to promotional or special fares and to bookings where the basic fare is non-refundable, limiting the amount that can be retained when a passenger does not travel, the new rules stated.
Transparency in fees and taxes
The regulator said that the CAR on “Refund of Airline Tickets to Passengers of Public Transport Undertakings” will come into force from March 26 and applies to scheduled domestic airlines, non-scheduled operators and foreign carriers operating to and from India.
To enhance customer flexibility during the booking process, airlines must provide a “look-in” option for 48 hours following the purchase of a ticket directly through their websites.
During this designated time, passengers have the option to cancel or change their bookings without incurring any extra fees, apart from any fare difference for the new flight. However, this feature is not available for domestic flights scheduled to depart within seven days or international flights departing within 15 days of booking.
The regulator has also established a ceiling on cancellation fees. Airlines and their agents are prohibited from charging a cancellation fee that exceeds the basic fare plus the fuel surcharge, excluding any extra fees that travel agents disclosed at the time of booking.
Directorate General of Civil Aviation (DGCA) said that the Civil Aviation Requirement on “Refund of Airline Tickets to Passengers of Public Transport Undertakings” will come into force from March 26 and applies to scheduled domestic airlines, non-scheduled operators and foreign carriers operating to and from India.
Additionally, airlines are not permitted to impose separate processing fees for refunds and must clearly display cancellation fees during the booking process.
In a bid to promote transparency, the CAR mandates that airlines clearly outline the refund amount and its breakdown during the cancellation process, either on the ticket or in a separate document.
Airlines are also required to publish their refund policies and amounts on their websites. Industry legal experts believe that this new disclosure standard will empower passengers to more effectively contest unjustified deductions in consumer courts and with ombudsmen.
On the practice of credit shells, the rules specify that holding the refund amount as a credit with the airline can only be done at the passenger’s request and cannot be used as a default or forced option.
“Making credit shells purely opt-in is consistent with global consumer protection trends in aviation, which emphasise refunds to the original mode of payment,” said a Delhi-based aviation law expert, noting that the DGCA had faced criticism during the pandemic for allowing extensive use of credit shells.
For foreign carriers flying to and from India, refunds must follow the ticket refund regulations of their home country, but the mode and timelines of refund need to comply with the DGCA’s framework for credit card, cash and agent-booked tickets.
The regulator has also prohibited airlines from charging for the correction of a passenger’s name if the mistake is flagged within 24 hours of booking, provided the ticket was bought directly from the airline’s website.
The new rules also introduce a specific clause for medical emergencies. If a passenger or a family member on the same booking is admitted to the hospital during the travel period, airlines may extend either a refund or a credit shell.
In all other cases involving medical issues, refunds will depend on an assessment of the passenger’s fitness to travel by an airline aerospace medicine specialist or a DGCA-empanelled specialist.